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6. Appropriate Regulation
6.1 Fair Tax Regime
6.2 Professional Services
6.3 Capital Markets

6. Appropriate Regulation

Goal – A comprehensive regulatory regime that is transparent, efficient, simple in its implementation and that leads to accurate reporting of property values and prudent protection from market risks

  

6.1 Fair Tax Regime (Strong)

Core Question: Do market participants feel the overall tax rate is fair and participate in formal transactions?

Strong – The top individual and corporate income tax rates are around 20%.

Transfer Tax (Strong)

6.1.1   What is the total property transfer tax including all duties and payments?

4.4% – Strong – Annual property tax 0.1%

Overall Tax (Strong)

6.1.2   What is the overall tax rate on entrepreneurs(as a percentage of profits)?

21% – Ranking – 90 out of 189, Strong

Source:
http://www.tax.gov.kh/en/

6.1.3 Divestment (Very Weak)

Survey Question

SQ 24  What is the tax on profits for foreign investors when divesting property?

Very Weak – Foreigners may not own land in Cambodia, 14% use tax withheld on rents or other income from the use of property by a non-resident tax payer.

Source:
USAID Land Tenure and Property Rights Portal www.usaidlandtenure.net/albania

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6.2 Professional Services (Weak)

Core Question:  Are the professional services necessary for efficient and transparent property markets available and appropriately regulated and supervised?

No – Weak

6.2.1 Asset Valuers (Weak)

Weak, Certification of valuers and agents is currently handled by the Cambodian Valuers and Estate Agents Association.

Survey Questions

SQ 25  Are property valuers licensed and/or certified by the government?

 

SQ 26   How effective are mechanisms in place to discipline valuers who engage in misconduct?

 

6.2.2 Brokers & Agents (Weak)

Survey Questions

SQ 27  Are real estate brokers and agents licensed and/or certified by the government?

 

SQ 28  How effective are mechanisms in place to discipline brokers or agents who engage in misconduct?

Source
http://www.cvea.org.kh/

6.2.3 Mortgage Professionals (Very Weak)

Very Weak, Mortgage markets is nascent. Typical interest rates are 12-13% for 10-15 year loans

Survey Questions

SQ 29  Are mortgage professionals licensed and/or certified by the government?

 

SQ 30  How effective are mechanisms in place to discipline mortgage professionals who engage in misconduct?

 

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6.3 Capital Markets (Very Weak)

Core Question: Are capital markets well-regulated and diversified enough to provide financial resources to private-sector entrepreneurs and innovators?

No – Very Weak

Capital Flows (Very Strong)

6.3.1  How restricted is the flow of capital into and out of the country?

Very Strong – Score 33 out of 144; Score 4.8 out of 7, the slow-moving bureaucracy and court system present challenges for foreign investors.

Source:
The Global Competitiveness Report 2015-2016, World Economic Forum
http://reports.weforum.org/global-competitiveness-report-2015-2016/

Security Exchanges (Very Weak)

6.3.2  Is the regulation of securities exchanges transparent, effective and free of influence from government and industry?

No – Very Weak, Ranking 118 out of 144; Score 3.2 out of 7

Source:
The Global Competitiveness Report 2015-2016, World Economic Forum
http://www.weforum.org/issues/global-competitiveness

Securitization (Very Weak)

6.3.3   What is the depth of asset-backed securities, mortgage-backed securities, high-yield bonds and highly leveraged loans?

 

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